Ebay is a multinational online auction service use to buy and sell items. It was founded in 1995 by Chairman Pierre Omidyar in San Jose, California. It was first called AuctionWeb, and eventually the name was changed to Ebay. Pierre did not think of AuctionWeb as a full-time job, it was more of a hobby for him. The first item Omidyar auctioned was a broken laser pointer which was sold for almost $15.00 USD. Amazed by the price the broken laser pointer was sold at --and that someone actually bought the item-- Omidyar realized how wide and exploitable the online auction market was.
Omidyar’s goal was to create “The perfect market,” and Ebay would be just that. A place where every seller could have the same opportunities to make profits, and where buyers could find whatever they looked for. Four years after its launching, Ebay was worth more than Sears or JC Penney. Pierre Omidyar himself was worth more than 4 billion dollars. And the company was about to expand internationally with its first offices in Europe.
The diversification of products and the increase of customers lead Ebay to its ultimate success. Ebay gives people the possibility to buy as well as to sell. Today the items sold on Ebay vary from collectibles to domain names; and prices go from under $1.00 to over millions of dollars. One of the most expensive auctions was a $2.6 million USD lunch with Warren Buffet.
Ebay is considered the largest marketplace of the internet. In a journey that started 18 years ago, eBay has managed to become one of the biggest websites with more than 2 million visitors daily. Its largest competitors include Amazon, Yahoo and Google; and its acquisitions include PayPal, Rent.com and Half.com. During the recent recession Ebay decreased its sales which lead to a very low stock price. However, with the decisions made by former CEO Meg Whitman and current CEO John Donahoe, the company’s value was recovered, and is steadily increasing.
The purpose of this case study is to point out Ebay’s potential and capabilities by analyzing its strengths, weaknesses, opportunities and threats. Our group’s recommendations include
EBay is the top ranked online auction within its industry, it is faced with many opportunities from their external environment that gives them the ability to keep being number one. One of the most important opportunities that eBay experienced is that they realized the huge potential market the Internet provided that allows millions of buyers and sellers to view products and conduct transactions. And with the increasing availability and the use of the Internet this could represent an opportunity to boost the number of users, since their whole company is based on the use of the Internet.
They have already have some success in its international expansion efforts, about 30% of their revenues comes from international activities, but if they want to keep being the leaders online auction...